BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1139
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          Date of Hearing:   January 10, 2000

                     ASSEMBLY COMMITTEE ON REVENUE AND TAXATION 
                                  Wally Knox, Chair
                AB 1139 (Strom-Martin) - As Amended:  January 3, 2000

          Majority vote.  Fiscal committee.
           
          SUBJECT  :  Personal Income Tax Checkoff:  Animal Population  
          Control Fund

           SUMMARY  :  Authorizes the addition of a new personal income tax  
          checkoff to fund an animal population control program that will  
          be administered by the Department of Food and Agriculture (DFA).  
           Specifically,  this bill  :  

          1)Allows the Animal Population Control Fund checkoff to remain  
            on the tax form for five years after it is added to the tax  
            form, provided it receives a minimum level of contributions  
            (equal to $250,000 in its first year on the form and increased  
            for inflation in subsequent years).

          2)Authorizes money contributed to the Animal Population Control  
            Fund to be used to reimburse the Franchise Tax Board (FTB) and  
            Controller for administering the checkoff and to fund an  
            animal population control program that will be administered by  
            DFA. 

          3)Requires the Animal Population Control Fund checkoff to wait  
            until another checkoff comes off the income tax form before it  
            is allowed to be added to the form.  However, if the animal  
            population control checkoff has not been added to the income  
            tax form by the 2002 tax year, the bill also requires the  
            checkoff to be placed on the form beginning in the 2003 tax  
            year (i.e., returns due in April, 2004). 

           EXISTING LAW  allows taxpayers to contribute money to one or more  
          of thirteen voluntary contribution funds by checking a box on  
          their state income tax return.  California law requires  
          contributions made through checkoffs to be made from taxpayers'  
          own resources (not from their tax liability, as is possible on  
          federal tax returns).  Checkoff amounts may be claimed as  
          charitable contributions on taxpayers' tax returns during the  
          subsequent year.









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           FISCAL EFFECT  :  An estimate of the cost of this bill is not yet  
          available from the FTB.  However, on the basis of FTB analyses  
          of other income tax checkoff bills, Committee staff estimate  
          that the cost will result in revenue losses in the range of  
          $15,000 annually beginning in the fiscal year after the checkoff  
          first appears on the tax form.

           COMMENTS  :   

          1)This bill is intended to help fund a program that will allow  
            low-income pet owners to spay and neuter their pets.  Although  
            the bill currently directs checkoff contributions to DFA, DFA  
            does not currently administer a program similar to the one  
            that the author wishes to be funded with the checkoff  
            contributions.  According to the author's office, the bill  
            will likely be amended to redirect funds to a nonprofit that  
            they expect to be established at some time in the future. 

          2)Reduced-cost spay and neuter services are currently available  
            to low-income individuals through various humane societies,  
            local government agencies, and veterinarians.  However, these  
            services are typically provided on a  
            jurisdiction-by-jurisdiction basis.  At present, there is no  
            state department or agency, private statewide organization, or  
            coordinated group of local agencies that runs a program to  
            help low-income individuals spay and neuter their pets.   
            Because no organization exists to receive and distribute the  
            funds contributed through the checkoff provided by this bill,  
            the bill may be premature.  

          3)This bill includes a sunset date and a $250,000 minimum  
            contribution requirement, two provisions the Legislature has  
            been requesting of any checkoff being considered for inclusion  
            on the tax return. 

          4)The bill also includes a requirement that another checkoff  
            come off the income tax form before this one can go on.  This  
            provision of the bill is similar to one included in SB 493  
            (Figueroa), Chapter 398, Statutes of 1999.  Requiring  
            checkoffs to wait in line before being placed on the tax form  
            is intended to address concerns that the tax form is very  
            close to exceeding its current two-page length.  Going to a  
            three-page form would be extremely costly for the state  
            because of increased printing and processing costs.  









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          FTB staff indicate that if more than one checkoff is waiting in  
            line to go on the form, they would likely use chaptering order  
            to determine the order in which the checkoffs would be added. 

          5)Unfortunately, there is no alternative that is clearly  
            preferable to queuing if we wish to retain a two-page form.   
            The 1999 tax form already double-stacks the checkoffs and uses  
            a smaller font in order to save space.  One alternative that  
            would eliminate the need for queuing involves restructuring  
            the income tax forms by removing checkoffs from the 540-series  
            forms and placing them all on a separate schedule.  Any  
            taxpayer wishing to contribute money to one of the checkoff  
            funds could then fill out and attach the additional schedule  
            to his or her return, in much the same way as that taxpayer  
            might complete Schedules CA or D and attach them to his or her  
            return.  However, removing the checkoffs from the form and  
            adding them to a separate schedule would reduce their  
            visibility and decrease the likelihood that taxpayers would  
            choose to contribute.  It would also increase printing costs.  
           
           REGISTERED SUPPORT / OPPOSITION  :   

           Support  

          The Fund for Animals
          Doris Day Animal League



























                                                                  AB 1139
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           Opposition  

          None on file
           
          Analysis Prepared by  :    Eileen A. Roush / REV. & TAX. / (916)  
          319-2098